Abstract

The purpose of the study is to explore the shadow economy of violent extremism through charity lenses and factors associated with misuse of charitable giving in a global financial system. It reviews the emergency response situations like COVID-19 when financial needs are urgent with lacked monitoring and control over payment disbursement to vulnerable groups. It highlights several governments’ significant steps to counter the illicit finance flow through ‘public-face’ charity organizations. Descriptive research was used to gather secondary data insights using published reports, articles, news portals, and policy briefs from renowned institutions. The findings depict four factors known as economic and capacity, socio-cultural, politico-legal, and global networks support in misuse of charitable giving to finance violent extremism. This study claims not all charitable giving misused for extremism and violence. However, there is a possibility that extremist groups could take advantage of using humanitarian organizations’ face to finance violent extremism. Two possible recommendations have been made to overcome this issue by adopting digital payment mechanisms and community engagement to design and deliver the COVID-19 response recovery programs.